Vietnam is late to the 4G party, and that’s a good thing

ITEM: Telstra gave an update this week on its progress with LTE rollouts, saying its 4G network now covers 99% of the Australian population.

According to a blog post from chief operations officer Robyn Denholm, Telstra’s recently established mobile sites in Woongenellup, Western Australia and in Kongwak, Victoria – as well as upgrades in Cardwell, Queensland and in Grace Plains, South Australia to support its LTE-700 network – have extended its coverage to 1.4 million square kilometers (more than five times the landmass of the UK!).

As it happens, just last week, Vietnam was celebrating its own LTE coverage milestone. According to VNS (via Vietnam.net), Pham Hong Hai, deputy minister of Information and Communication (MIC), said 95% of the Vietnamese population now has 4G coverage via 43,000 installed base stations.

There’s an interesting difference between those two nuggets of information: the timeframe.

Telstra launched its LTE service in September 2011, which means it’s taken close to six years to achieve 99% LTE coverage. By contrast, Vietnam only issued LTE licenses for the 1800 MHz and 2600 MHz bands near the end of last year, with services only being launched this year by three of four licensees: Viettel, Vinaphone, and MobiFone. (A fourth LTE licensee, Gmobile, has not yet launched 4G services.) And coverage is already at 95% after just eight months.

However, there’s more to the story than that.

For a start, Vietnam’s operators have been testing and trialing LTE for several years now. More to the point, that 95% figure is the aggregate coverage between Viettel, Vinaphone, and MobiFone. None of them cover that much of the population on their own. Perhaps each individual operator will eventually reach 99% coverage faster than Telstra did – the MIC is pushing for fairly aggressive rollouts over the next few years because it wants the country to catch up to the Digital 5G IoT Era that others in the region are planning. But for now, they have a ways to go.

It’s also worth pointing out that coverage does not equal usage. According to the MIC, there are currently 6.3 million 4G subscribers in Vietnam. Compared to Vietnam’s total mobile subscriber base (close to 130 million at the end of 2015, according to GSMA Intelligence), that’s not a lot. According to VNS, while 4G takeup has been relatively fast compared to 3G takeup in Vietnam, it’s slower than 4G takeup in other markets.

Part of that has to do with 4G device availability and cost, and also – ironically – the lack of coverage from individual operators. While 95% of the country may have access to a 4G signal, that only really matters if your current cellco is one of the operators providing that signal. Even if it does, reports VietnamNet Bridge, many existing 3G subscribers don’t see a big enough difference between the two services to justify the upgrade.

The report notes that competition is fierce, but operators are trying to avoid price wars by focusing on service quality, content bundles and data caps as differentiators. But they’re struggling to get customers to see the differences that make a 4G upgrade worth the effort.

Even so, many markets have gone through similar teething problems with 4G, and Vietnam is still expected to see rapid 4G growth in the next few years.

Admittedly it seems funny to talk about Vietnam getting their 4G game together at a time when everyone else is moving on to 5G. But it’s also a welcome reminder that not everyone is going to board the 5G train in 2020. The glorious 5G World Utopia that vendors love to talk about will not be evenly distributed – nor will the equally glorious economic and productivity benefits. Many markets will need much more time to build up to that – including those who are only just getting started with 4G.

On the other hand, one of the advantages of coming in late to the 4G game is the ability to leverage the technological advances in LTE since the standard was first completed by the 3GPP. Vietnam’s cellcos are deploying well-seasoned technology that’s easier and cheaper to deploy now than it was six years ago – advantages that Telstra and other early movers didn’t have when they first launched LTE. Compatible devices are also much cheaper now, even if they’re not quite cheap enough for the mass market just yet. Market and regulatory conditions aside, Vietnamese cellcos have the potential to move faster in terms of deployment.

So that 95% stat may need some qualifiers, but Vietnam’s 4G journey is off to a roaring start. All they need to do now is figure out how to monetize it enough to fund their eventual 5G roadmap.

John Tanner has been covering the Asia-Pacific telecoms industry since 1996. He has two degrees in telecommunications, and worked for six years in the US radio industry in various technical and advisory capacities, covering radio and satellite equipment maintenance, studio networking, news writing and production, the latter of which earned him several regional and national awards.

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